Countdown to Reform

MICHAEL WADDELL | Special to The Daily News

Illustration: iStockphoto

The Obama administration recently took the next step in implementing the new health care reform by laying out more specific guidelines regarding the health insurance market reforms. The Department of Health and Human Services published the new regulations on Nov. 20.

Currently between 250,000 and 1 million Tennesseans do not have health insurance, but beginning in January 2014, health insurance companies will be required to sell coverage to anyone who applies, and renewal of health care coverage will be guaranteed each year. Enrollment for policies beginning on Jan. 1, 2014, is anticipated to begin in October.

“The Affordable Care Act is building a health insurance market that works for consumers,” said Health and Human Services Secretary Kathleen Sebelius in a prepared statement. “Thanks to the health care law, no one will be discriminated against because of a pre-existing condition.”

Insurance providers will no longer be able to charge women higher rates than men, and restrictions will be set to protect the elderly from being charged exorbitant insurance fees compared to the young (although they still can be charged up to as much as three times more than someone substantially younger).

All Americans will also have the security of knowing that they do not have to worry about losing their coverage if they are unexpectedly laid off or change jobs.

The new regulations also detail how insurance providers will need to prove that their plans will cover at least 60 percent of average annual medical expenses for each policy. Ten critical categories must now be covered, including ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.

“For the average person on the street, they are not likely to notice any changes until Jan. 1, 2014,” said Jenny Gunderson, TennCare director of communications.

In mid-December, Tennessee Gov. Bill Haslam decided that Tennessee will not create a state-run health insurance exchange due to concerns over the lack of guidelines issued so far by the federal government. Arkansas decided to pursue a partnership with the federal government to run its exchange, while Mississippi chose to run its own.

Gary Cohen, the director of the Center for Consumer Information and Insurance Oversight, vowed in a recent conference call that there will be an exchange open in every state by Oct. 1.

The cost of health insurance on the exchanges will be subsidized from tax credits for people with incomes up to 400 percent of the federal poverty level of $11,170 for 2012, or a total of $44,680. People who earn less than $14,856 (133 percent of poverty) this year will qualify for Medicaid in states that decide in favor of the expansion of Medicaid. Haslam has remained undecided about whether to expand Medicaid in Tennessee. Arkansas has decided in favor of Medicaid expansion, while Mississippi chose against expansion.

Beginning in 2014, Medicaid expansion will grow to allow coverage to almost all people whose incomes are less than 138 percent of the federal poverty level – currently $15,028 per year for a household of one or $30,843 per year for a household of four. An estimated 1.6 million additional Tennesseans under the age of 65 will have access to Medicaid, according to Kaiser Family Foundation data.

“The federal government will also provide subsidies to certain families with income levels between 100 percent and 400 percent of the national poverty level to purchase insurance on the exchange,” said Gunderson.

Many substantial changes brought about by the Patient Protection and Affordable Care Act, which was signed into law in 2010, are already having an impact across the country by making health care more accessible and more affordable for millions of people, while at the same time strengthening Medicare and holding insurance companies more accountable.

BlueCross BlueShield of Tennessee established an internal office of health care reform in 2010 to coordinate efforts to comply with the law, according to BCBS of Tennessee spokesman Gary Tanner.

“We feel having the flexibility to make health care decisions locally would have been more beneficial for the state versus having those decisions made by federal government.”

– Chris Ramsey, Director of health care reform, BCBS of Tennessee

“Our preference was for a state-based exchange in Tennessee due to the existing relationships that we have the staff in Nashville that oversees the various health programs for the state,” said Chris Ramsey, BCBS of Tennessee director of health care reform. “We feel having the flexibility to make health care decisions locally would have been more beneficial for the state versus having those decisions made by federal government.”

Beginning on Sept. 23, insurance providers were mandated to provide clear, consistent and comparable information about their health plan benefits and coverage.

BCBS now sends out a four-page uniform summary of benefits and coverage, which is also available online.

“There are three major components of the summary: basis plan information on benefit options and cost sharing, uniform definitions of standard insurance and medical terms, and coverage examples that are designed to show the cost pattern specific to the benefits include in the summary,” said Ramsey.

Millions have already benefited from changes introduced in 2010.

Approximately 3.1 million young adults who were uninsured now have coverage by being able to stay on their parent’s health plan until they turn 27, and an estimated 54 million additional Americans now receive coverage through their private health insurance plan for many preventive services like wellness visits and cancer screenings without cost sharing such as copays or deductibles.

Women are also benefiting from more preventive services. Approximately 47 million women now have guaranteed access to additional preventive services without cost-sharing for policies renewing on or after Aug. 1, 2012.

“These preventative services with no cost sharing for the member include the annual well woman preventative care benefit, counseling for sexually transmitted infections, screenings and counseling for HIV, cancer screenings like mammograms, and a new option for contraception-only prescription drugs,” Ramsey said.

The parents of more than 17.6 million children with pre-existing conditions no longer have to worry that their children will be denied coverage because of a pre-existing condition, and 86,000 people with pre-existing conditions have gained coverage through the Pre-Existing Condition Insurance Plan – a temporary program offering more affordable health coverage for uninsured individuals who have been denied health insurance because of a pre-existing condition.

Add to those numbers 105 million Americans who no longer have a lifetime dollar limit on essential health benefits.

An estimated 25,000 small businesses in Memphis, and 360,000 small businesses across the country, will receive relief from more tax credits and affordable insurance choices as 2014 approaches.

Health insurance providers are now required to meet the 80/20 rule, or Medical Loss Ratio, in which at least 80 cents of each premium dollar must be spent on the patient’s health care or improvements to care. If insurance providers fail to meet the standard, they must pay a rebate to their customers. The 80/20 rule has already led to an estimated $1.1 billion in rebates to nearly 13 million consumers, for an average rebate of $151 per household.

“Tracking our Medical Loss Ratio is an initiative that we are now engaged with heavily,” said Ramsey.

Insurance companies will also have to publicly justify any rate increase of 10 percent or more, and states will be equipped with new resources to review and block any premium hikes. These types of rate reviews have already helped save people across the country an estimated $1 billion in insurance costs.

At least 19 million early retirees, workers, their spouses, surviving spouses and dependents have had their premiums or cost sharing reduced thanks to the Early Retiree Reinsurance Program, which has provided $5 billion in reinsurance payments to employers so they can continue to provide benefits to their retired workers who are not yet eligible for Medicare.

For the nearly 50 million seniors and Americans with disabilities who depend on Medicare every day, they can rest a bit easier knowing that their existing guaranteed Medicare-covered benefits will not be reduced or taken away. The new health care is touted to make Medicare stronger and extends the life of the Medicare Trust Fund by eight years thanks to reduced waste, fraud and abuse, and the slowing cost growth of Medicare.

The average person with Medicare is expected to save approximately $5,000 from 2010 to 2022, and people with high prescription drug costs like those with chronic conditions such as diabetes and high blood pressure could save as much as $18,000 over the same period.

Nearly 5.6 million seniors and people with disabilities have saved more than $4.8 billion on prescription drugs thanks to the Affordable Care Act. These savings include a one-time $250 rebate check to seniors who fell into the prescription drug coverage gap in 2010, and a 50 percent discount on brand-name drugs.

More than 32.5 million seniors have already received one or more free preventive services, like life-saving cancer screenings, as well as annual wellness visits. During the first nine months of this year, more than 20.7 million people with original Medicare received at least one preventive service at no cost.